Sleep mode doesn't work

some program might be getting in the way. Are you sure that you aren't running insomniax or another program that might hinder the sleep? Some other programs, like file sharing applications, might do the same as well.

i'd also remove all peripherals, such as mice, which can keep a book awake.

as a fun test, get a refrigerator magnet and move it back and forth over the right side of the keyboard. This should activate the sleep function. you don't need a really powerful magnet but you may need to move it slow and have it close to the computer body. Here's a picture. and Here is a link to a forum thread about it.

If the magnet came undone and moved, it would cause this and would be easy to fix. Just pop the LCD back off, close the lid and move the magnet to a location that causes the book to sleep, then tape it there and close it back up. This is frequent after LCD replacements.